Accounting

One of the most frequently discussed topics in financial reporting is unnecessary complexity in accounting standards.

We define an unnecessarily complex standard (or provision in a standard) as one that is costly or difficult to implement and provides little or no incremental information to financial statement users when compared with simpler alternatives.

The Board has recognized this issue and in recent standards (and proposed standards) tried to avoid incorporating unnecessary complexity.

In addition, the Board has considered ways to reduce unnecessary complexity in major Topics within its Accounting Standards Codification.

The Board has also explored the potential for reducing complexity by reorganizing Topics and discussed this topic in recent speeches.